RH Modi & Co in a newspaper advertisement denied signing the auditor’s report of listed company C Mahendra Exports for FY2015
Mumbai-based auditors RH Modi & Co have published an advertisement in local newspaper saying that the firm has not signed Auditors Report of C Mahendra Exports Ltd for FY2014-15. The company is listed on both BSE and National Stock Exchange (NSE).
"C Mahendra Exports Ltd...have in complete illegal and malafide manner filed, uploaded and circulated the Annual Report with the financial results of the Company for the Financial Year 2014-15 and the Auditors Report dated 7th September 2015 purporting that the financial statements have been audited and Auditors Report signed by us," RH Modi & Co said in the advertisement.
According to the company's regulatory filing, it had filed its revised financial results for 31 March 2015 (Audited) on 5 September 2015. Within a fortnight, it filed Revised Audited Financial Results for the quarter and the year ended 31 March 2015. Both these filings are without auditors report. In fact, in both filings, the company had stated, "The above results were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on 26 August 2015.
However, the company website displays its Annual Report for FY2014-15, including the Auditors Report. Modi & Co has however denied signing any such report.
"...neither the financial statements for the year ended 31/3/2015 are finalised by us nor the purported Auditor's Report given in the Annual Report signed by us. Also despite our strong objections to the passing of the Company's accounts in their present form, the same have been passed by the Shareholders of the Company in the Annual General Meeting held on 26 September 2015," the audit firm says.
RH Modi & Co says it has sent several letters to the Company and concerned authorities, including NSE, BSE, Securities and Exchange Board of India (SEBI) and Registrar of Companies pointing out the gross irregularities and dishonest of the company.
However, according to a senior auditor, since they (RH Modi & Co) were appointed as auditors, they could have signed the report with all qualifications.
In its revised financial results for 31 March 2015, the diamantaire and jewellery company had stated that its assets have been declared as non-performing assets (NPAs) by a consortium of bankers and have also freezed all working capital facility granted to the company. "Company's operating results have been materially affected due to various factors including non-availability of finance in view of the consortium bankers recalling the financial facilities granted, symbolic possession of premises have been taken by the Bankers," the statement says.
Further, it says, "There is ongoing dispute between the Promoters of the Company. However no financial adjustment is required to be made in the financial statement on account of this dispute."
As on 31 March 2015, promoters held 60.02% stake in the company. Second largest shareholders in the company at 13.15% were individual investors holding nominal share capital of up to Rs1 lakh. The promoters include Mahendra Chandulal Shah (14.92%), Kanu Chandulal Shah (8.53%), Champaklal Kirtilal Mehta (8.11%), Pravin Chandulal Shah (7.82%), Sandeep Mahendra Shah (5.69%), Suresh Kirtilal Mehta (5.31%), Prakash Kirtilal Mehta (3.81%), Paraskumar Champaklal Mehta (3.73%), Samir Pravinchandra Shah (2.01%) and Pravin Kirtilal Mehta (0.1%).
At 2.20pm Wednesday, C Mahendra Exports was trading marginally down at Rs2.20 on the BSE, while the 30-share benchmark was also marginally down at 27,294.